Lord Borrie: We had an interesting debate in Grand Committee on this proposal. I went back to read the closing remarks of the noble Lord, Lord Hodgson, after the Minister had spoken. He said that the Charity Commission should have a proactive, facilitatory and helpful role. I agree about the facilitatory and helpful role, but the noble Lord has not let go unnoticed that general function 2, a few lines above where his amendment would be inserted on page 6, refers to:

"Encouraging and facilitating the better administration of charities",

which seems perfectly reasonable. Clause 24, which the noble Lord has not mentioned, refers to the power of the Charity Commission to give advice and guidance, which I should have thought was a useful supplementary role, and which is given special mention.

However, I doubt whether it is the job of the Charity Commissiona regulatory body, as the noble Lord agrees that it isto go further than being helpful and become proactive. I know that the noble Lord wants the Charity Commission to be proactive in various respects, but I think that being proactivewhich must mean promoting charitiesis not a suitable job for the Charity Commission, so I doubt whether we should pass the amendment.

Lord Phillips of Sudbury: I must confess that I have two minds about the amendment. I hear what the noble Lord, Lord Borrie, says, and there is much force in it. On the other hand, the noble Lord, Lord Hodgson, made a good point when, looking at new Section 1C"The Commission's general functions"he pointed out that it is a pretty arid list, especially when you realise that Clause 6 concerns the giving of advice not to the sector as a whole but to any Minister of the Crown. If we take the objectives and the general functions together, I wonder whether it does not add up to too dry and regulatory a menu, especially as the commission is proud of its dual function of regulator and friend of the charity

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sector. I shall be interested to hear what the Minister says in response, because we have another opportunity to consider this point at the next stage.

Lord Swinfen: I take the amendment as one encouraging the Charity Commission to look in a friendly manner on the new ideas proposed by charities and would-be charities, rather than being obstructivesaying, "It's not been done before; you can't do it". When I set up my charity, the Charity Commission had absolutely no idea what telemedicine was. It asked, "How does it help anyone?" With the aid of several articles, those dealing with our registration as a charity were taught what telemedicine is and how it works. That was about seven or eight years ago. Today, few people in the country do not know what telemedicine is; then it was very new.

I would not want the Charity Commission automatically to say, "It's not been done before; you can't do it". I want it to think, "That's new; let's see how it can be done and how it helps peoplehow it helps the public generally". With a bit of persuasion, in our case, that was done. I am grateful; the charity has been growing exponentially since then because the demand has been so great and it has helped hospitals in remote places in the developing world in post-conflict situations.

That is how I read my noble friend's amendment and I hope that the Minister will support it.

Lord Joffe: I support the amendment. The very essence of the charitable sector is innovation and creativitydoing things that governments cannot do. The normal tendency for regulatory authorities is to become very risk-averse, as the noble Lord, Lord Hodgson, pointed out. It is important that in this case the regulatory authorities should take the view that innovation in charity should be encouraged.

Lord Bassam of Brighton: This has been a useful short debate on the amendment. In the end, I very much come down on the side of the argument advanced by the noble Lord, Lord Borrie, who has picked his way through where we, the Government, are on this issue and has accurately summarised our position.

The noble Lord, Lord Phillips, makes the point about legislation sometimes being rather arid in its description. Behind the way in which we have set out our approach to this in the Bill there is a general encouragementperhaps more than thatto see the Charity Commission as being more facilitative and innovative, in so far as the charitable sector is concerned.

In some respects the Charity Commission is a rather unique regulator; we do want to see it as an encouraging regulator. We want to see its characteristics develop so new ideas for solving old problems in the charitable world are apparent. Where we perhaps part company with the noble Lord, Lord Hodgson, is that we take the view that the Bill already allows, enables and equips the commission to be an innovative regulator. It is for that reason that we do not think that the amendment is required.

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The commission has five objectives. They are not particularly in an order of priority, but for the purposes of debate on this amendment the most important one is the fourth: the charitable resources objective. The wording of this objective, which is carried over from the 1993 Act, is designed to promote the effective use of charitable resources. It is our expectation that the commission will adopt an imaginative approach towards that. There are already signs that that is the case.

In support of its objectives, the Bill gives the commission six general functions, of which I single out in this context the function of encouraging and facilitating the better administration of charities. Again, I interpret that as being an encouragement to be more imaginative in approach.

I am clear that the objective of promoting the effective use of charitable resources, and the function of encouraging and facilitating the better administration of charities, together give the commission full scope and opportunity to encourage development and innovation in the charitable sector. In fact, the commission has already signed up to working in that way. It is part of the commission's new mission statement, published in March, that it will work by "encouraging innovation and effectiveness".

Clearly the commission is confident that it can legitimately work by encouraging that innovation and effectiveness, whether or not the Bill goes through in its current form, and without needing to be given a specific function in terms of the amendment tabled by the noble Lord, Lord Hodgson. I entirely agree with the commission in that approach.

It follows on from that that, while I certainly can see merit in what the noble Lord said, we feel that the way in which the legislation is drafted and the way in which the commission has already responded to that, the amendment is not necessary.

Lord Phillips of Sudbury: Taking account of the main strand of the Minister's argument, which is that the Charity Commission does not really have the staff and so forth to engage in facilitation of development and innovation, I wonder whether he would think over the possibility of shifting this to the next clause, "The Commission's general duties". In Clause 7, paragraph 1 of new Section 1D(2) reads,

"So far as is reasonably practicable"

which is important

"the Commission must, in performing its functions, act in a way",

which is compatible with the encouragement of its objectives. My new paragraph (c) would refer to "innovation in the charitable sector". Innovation is nowhere in this important clause; there is a lot of stuff about effectiveness but nothing about innovation. The noble Lord, Lord Joffe, made that point very strongly.

Lord Bassam of Brighton: Innovation is very much allied to being effective, because to be effective one must innovate and get ahead of trends and anticipate what is coming around the corner. I understand the point that the noble Lord has made and I am never a closed mind on these issues but I am not really

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prepared to go further than that. The Commission is demonstrating that it is providing a response to the challenges that new charities and new ideas coming from the charitable sector are likely to throw up and it is likely to anticipate.

Lord Joffe: The noble Lord, Lord Borrie, referred to administration, which is almost the direct opposite of innovation. I do not think that administration covers innovation in any way whatever.

Lord Hodgson of Astley Abbotts: I am grateful to the noble Lord, Lord Joffe, for that intervention. It was a very disappointing response. The Minister said that the noble Lord, Lord Borrie, got it about right, which is praise indeed. The noble Lord, Lord Borrie, gave three reasons for wishing to reject the amendment. The first was that new Section 1C(2)(2), in Clause 7, is about facilitating better administration. However, as the noble Lord has just said, that is not what my amendment is about. My amendment is about looking forward and encouraging the emergence of new forms and not being risk averse.

The second reason given by the noble Lord was that Clause 24 gave the Charity Commission,

"Power to give advice and guidance",

but that is a completely different sort of activity from being part of its general functions.

Thirdly, the noble Lord quoted back to me my remarks from the previous Committee stage. He said that I had used the words, "facilitatory", "helpful" and "proactive" and that I was to be hung on the fact that I had used the word "proactive". He accepted that the first two words were in accordance with the meaning of the word that I used, but that I had been unguarded enough towards the end of the debate to use the word "proactive".

The noble Lord, Lord Phillips, was right when he said that this is an "arid" list of functions. The Minister went on to talk about being an "encouraging regulator". I see nothing about innovation here. The Government's answer on this point is not good enough and I wish to test the opinion of the House.